Only 131 years ago, the highest court of England, the leader of industrial revolution did not think lending to women was a good idea. Today in 2017, we have come a very long way. According to the state of the micro-credit summit campaign 2001 report, 14.2 million of the world’s poorest women now have access to financial services through specialized microfinance institutions, NGOs and other Non-bank financial institutions. These women account for nearly 74% of the 19.3 million of the world’s poorest people now being served by microfinance institutions. Most of these women have access to credit to invest in businesses that they own and operate themselves. Most of them have excellent repayment records, in spite of the daily hardships they face. Contrary to conventional wisdom, they have shown that it is a very good idea to lend to the poor and to women. Despite these statistics, I can conveniently still say, that the shortfalls in Ghana in terms access to credit by these women and the poor needs further attention, in this direction. This article is not meant to be a comprehensive and exhaustive presentation of all that is known about the subject of microfinance and empowerment. We seek to build on the growing body of research on the topic, blend academic and practitioner perspectives and experiences, and encourage further exploration and dialogue on the subject.
Micro-finance is a novelty which includes the provision of a broad range of financial services such as deposits, loans, payment services, money transfers, and insurance and non-financial services to the poor, the productive poor and low-income earners or households. A majority of the microfinance programmes target women with the explicit goal of reducing poverty and empowering them. Some argue that women are among the poorest and the most vulnerable of the underprivileged and thus, helping them should be a priority. Others believe that investing in women’s capabilities empowers them to make choices and further contributes to greater economic growth and development. Moreover, an increasing number of microfinance institutions (MFIs) prefer women members as they believe that they are more trustworthy and reliable. Microfinance is usually administered through microfinance institutions which use various delivery methods, such as group lending and liability, pre-loan savings requirements, gradually increasing loan are repaid fully and promptly.
Microcredit is a financial innovation which originated in developing countries where it has successfully enabled extremely impoverished people to engage in self-employment projects that allow them to generate income, begin to build wealth and exit from poverty. Microcredit is the extension of very small loans to the entrepreneurs and to others living in poverty that are not considered bankable. These peoples lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a tool for socioeconomic development. Prof. Muhammad Yunus explains the role of micro credit in facilitating women potential as ‘women have plans for themselves, for their children, for their home, their meal’. Unfortunately, even in this modern era women are still being discriminated against, most especially in the rural setting in Ghana. To make matters worse, title deeds for rural homes in Ghana are usually in the names of the husbands, which leave the wife and children vulnerable to being evicted by the husband’s family, should he pass away. Even the laws in the country has not made a significant improvement to women’s inheritance rights because most are still ignorant of the law.
KWASI KYERE (Ph.D.)
CHIEF EXECUTIVE OFFICER;
STAR ALLIANCE MICROFINANCE LIMITED